Tag Archives: taxes

“Pay Their Fair Share”

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Once again, I challenge all those Progressive-Democratic Party politicians, including but not limited to (in no particular order), Senator Elizabeth Warren (MA); soon-to-be-ex-Senate Majority Leader Chuck Schumer (NY); former Senator (DE), Vice President, and soon-to-be-former President Joe Biden; former Senator (CA) and soon-to-be-former Vice President Kamala Harris (D); Senator Martin Heinrich (NM); and Congresswoman Melanie Stansbury (NM) to identify, specifically, what is the fair share of income taxes that the rich should pay—hard dollar amount, or tax rate, or percent of income, or…. Cynically, all they’re willing to say is their feelz: pay up and pay more; it’s not “fair,” otherwise.

Here, though, in concrete terms, is the situation with that especially evil bunch of Americans, those in the top 1% of income-tax filers:

  • 22.4% of the country’s total reported earnings
  • share of income taxes paid 40.4%
  • average federal tax rate of 26.1%

Here is what the smaller people pay in the way of income taxes:

  • • bottom 10%: no taxes
  • second income decile: -4.8%–yes, negative, due to all the refundable tax credits they get
  • third income decile: 2.8%

Back to the top:

  • top decile—which includes those 1%-ers: 27%
  • especially evil top 0.1% earners: 33.5%

This graph shows the trend from 2001 to 2022:

Of course, those Party politicians know all of this; they being so much smarter than us poor, ignorant average Americans, and all. It’s a measure of their dishonesty and of their contempt for us that they foist their cynical class divisiveness on us. It’s also an indication of what their natural limit and purpose on taxing is: their limit is all of it from their definition of rich, who aren’t all that numerous; their purpose is to give it to enough of the rest of us to buy enough votes to stay in power.

It hasn’t worked yet, but the rest of us need to remain vigilant and active, lest the outcome of last month’s elections become just a one-off bump in Party’s march. A warning of that is given by the outcome in the House of Representatives elections, where not enough Progressive-Democrats were tossed.

Another Misapprehension

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Some tax cuts are better than others goes the headline, and that’s true enough. But then the newswriter wanders afield.

…extending the lower individual tax rates that expire after 2025—by far the largest component of any likely tax bill and the one that directly affects the most voters—would put more money in consumers’ pockets without driving a meaningful change in the economy’s long-run trajectory. There is broad bipartisan support for retaining those lower tax levels that Republicans created in 2017, but keeping individual tax rates in place is unlikely to change most people’s decisions about whether and how much to work.

It’s certainly true that not all tax cuts would change, or have any effect, on us taxpayers’ spending behavior. So what? Those favoring higher taxes have yet to articulate a coherent government need for the money, beyond expansive welfare payments and expansive welfare transfers to the States—all without any sort of work requirement.

At bottom, too, it’s our money, not government’s, and we should be the ones who decide how to spend it, or not. Nor do the taxers and government bureaucrats and politicians get to tell us how or whether to spend our money—not directly (that’s part of the intrusiveness of Obamacare that has yet to be corrected), and not indirectly by taxing us and spending our money in government’s name. We’ll allocate our money to our financial needs and desires far more efficiently and with far more specificity than government can ever be capable of.

Full stop.

A Misapprehension

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This one is, surprisingly, on the part of The Wall Street Journal‘s editors. In an otherwise cogent editorial with several sound points regarding former President and Republican Party Presidential candidate Donald Trump’s offers of specially targeted tax cuts, the editors closed with this mistake:

Mr Trump is now proposing to narrow the base, so [tax] rates will have to be higher.

Not at all. Alternatively, and far more optimally, with a narrower tax base, spending will have to be lower. That’s universal, too. With reduced (tax) revenues for any reason, spending would need to be lower. With current government spending, in fact, even with flat revenues, spending badly wants reduction.

It seems the august editors have lost sight of the cause of our nation’s deficits and debt, the cause extant throughout our history.

Tax Deductions

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Progressive-Democrat Vice President and Party Presidential candidate Kamala Harris wants to expand the start-up business tax deduction from $5,000 to $50,000 [sic].

However, in typical Party duplicitous fashion, she gives with one hand and takes away far more with the other. She wants to raise taxes on us citizens and our businesses so much that that deduction increase would disappear in the flood.

  • Increase the corporate income tax rate from 21% to 28%
  • Increase the corporate alternative minimum tax introduced in the Inflation Reduction Act from 15% to 21%
  • Quadruple the stock buyback tax implemented in the Inflation Reduction Act from 1% to 4%
  • Make permanent the excess business loss limitation for pass-through businesses
  • Further limit the deductibility of employee compensation under Section 162(m) [currently limiting public companies’ tax deduction for compensation of covered executives to $1 million per individual]
  • Increase the global intangible low-taxed income tax rate from 10.5% to 21%, calculate the tax on a jurisdiction-by-jurisdiction basis, and revise related rules
  • Repeal the reduced tax rate on foreign-derived intangible income

How about cutting out the intrinsic contradictions of deductions here and tax rate increases there to pay for them? How about, instead, simply lowering tax rates across the board—begin, say, with a rate reduction equal in effect to the sum of all the subsidies and credits—Harris’ latest small business “deduction,” for instance and both Harris’ and Trump’s child tax credit, along with the myriad welfare subsidies?

Let the resultant vast growth in activity in the private economy pay for the tax rate decrease. The Jack Kennedy large tax rate deduction, the Reagan nearly as large tax rate reduction, and the Trump tax cuts all led to economic expansion that produced a net increase in revenues to the Federal government—all those cuts were paid for by the responding expanded economic activity.

But Progressive-Democrats are incapable even of saying the words “tax rate reduction.”

Wrong Response

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As usual. And as usual, the wrongness of the response is due to mischaracterizing the problem.

The Treasury Department on Thursday released 603 pages of proposed rules for the corporate alternative minimum tax, or CAMT, reaching a milestone in this exceptionally complex endeavor for regulators and corporate tax executives. The proposal comes more than two years after Congress passed the law creating the tax and more than 20 months after it took effect.

The rationalization is offered by the Biden-Harris’ Deputy Treasury Secretary Wally Adeyemo:

This is about tax fairness. The ability to use accountants and lawyers to reduce tax bills down to zero gives billion-dollar corporations a competitive advantage over smaller businesses.

They don’t understand what’s fair. Here’s what’s fair: make the problem irrelevant by simplifying the corporate tax code, rather than complexifying it, by reducing the corporate tax rate to that paid by those ill-treated small businesses. Even fairer, and not just for businesses, would be to reduce the corporate tax rate to zero for all businesses. That way, large corporations, with their accountants and lawyers, won’t have any “unfair” advantage over smaller businesses.

And there’d be no need to write 603 pages of regulation to implement a simple-sounding and wrong-headed tax rule. Which would reduce the need for all those Treasury bureaucrats whose jobs center on writing arcane, excessively complex regulations.